The Danger From Dubai

Although it was reprehensible that the United Arab Emirates (UAE) refused to give Israeli tennis player Shahar Peer an entry visa for a WTA-sanctioned tournament and the world stood idly by, there might be a silver lining to the whole episode. It could serve as a wake-up call to remind the world of the dangers that the UAE poses to Israel -- while most of the international attention is focused on Iran.

Many people -- including prominent Jews such as Abe Foxman, director of the Anti-Defamation League, and David Rubinstein, co founder of the private equity firm Carlyle Group -- believe that the United Arab Emirates is a moderate Arab state (an oxymoron if I ever heard one) and dismiss any concerns. Although NYU has many Jewish -- and specifically Israeli -- professors and students, Foxman supported NYU's decision to build a branch in Dubai. He said in City Journal, "Abu Dhabi and Dubai are moving towards greater openness and tolerance."

For sure, the current economic crisis and the low price of oil have blunted Dubai's power, but that does not mean that they will not pose any economic threat to Israel in the future. Although the UAE might be quieter about it, the Arab League boycott of Israel is very much in effect there. The Jerusalem Post reported on their telephone conversation with Muhammad Rashid Adin, a member of the Dubai Customs Department's Office for the Boycott of Israel. "Yes, of course, the boycott is still in place and is still enforced. If a product contained even some components that were made in Israel, and you wanted to import it to Dubai, it would be a problem."

While it makes for great newspaper headlines when Netanyahu proclaims that "it is 1939 all over again" with regard to Iran, I am equally concerned that landmark days in Israeli history like February 17, 1982, will stop happening. February 17 was the date that the first Israeli company, Teva Pharmaceuticals, went public on the Nasdaq exchange. This exchange is now partially Arab controlled. If the Arab boycott were extended to the Nasdaq, the Israeli economy would lose an important source of capital.

The Nasdaq sold 20% of itself to Borse Dubai in a complicated swap involving the OMX Exchange in Sweden. Borse Dubai is a holding company created by the government of Dubai for their holdings in Dubai Financial Market and the Dubai International Financial Exchange (DIFX). When the deal was announced, Borse Dubai's chairman, Essa Kazim, told the New York Times, "Our primary objective is to build a world class, growth oriented exchange out of Dubai and to become the center for capital markets activities in the emerging markets."